DeGracia v. Southwest Airlines Co

Filing 33

MEMORANDUM OPINION AND ORDER granting 22 Motion to Remand to State Court, denying as moot 6 Motion to Consolidate Cases filed by Alexander DeGracia. The courts holds that it lacks subject matter jurisdiction and, pursuant to 28 U.S.C. § 1447(c), remands this case to the 101st Judicial District Court of Dallas County, Texas. (Ordered by Judge Sidney A Fitzwater on 11/29/2016) (aaa)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
ALEXANDER DEGRACIA,

§
§
Plaintiff,
§
§ Civil Action No. 3:16-CV-0788-D
VS.
§
§
SOUTHWEST AIRLINES COMPANY, §
§
Defendant.
§
MEMORANDUM OPINION
AND ORDER
Plaintiff’s motion to remand this removed action presents the question whether his
state-law claims for discrimination based on race and national origin are preempted by the
Railway Labor Act (“RLA”), 45 U.S.C. §181, and Federal Aviation Administration (“FAA”)
regulations, thereby permitting the case to be removed under this court’s federal question
jurisdiction. Concluding that defendant has failed to demonstrate that the claims are
preempted, the court grants plaintiff’s motion, remands this case to state court, and awards
plaintiff his attorney’s fees, costs, and expenses under 28 U.S.C. § 1447(c).
I
Plaintiff Alexander DeGracia (“DeGracia”) brought this suit in Texas state court
against defendant Southwest Airlines Company (“SWA”), alleging claims for discrimination
based on race and national origin, in violation of the Texas Commission on Human Rights
Act, Tex. Lab. Code Ann. § 21.051 (“TCHRA”). DeGracia alleges that he is a HispanicAmerican of Puerto Rican descent who was employed as a pilot for AirTran Airways

Company (“AirTran”) from 2007 until 2014, with intermittent periods of military leave. In
2014, after SWA and AirTran merged, DeGracia began training as a SWA pilot. He was
terminated from SWA in 2014. During his employment with SWA, DeGracia was a member
of the Southwest Airlines Pilots’ Association (“SWAPA”) and subject to the collective
bargaining agreement (“CBA”) between SWAPA and SWA.
After DeGracia was terminated, he filed a grievance under the CBA procedures,
seeking reinstatement as an employee in training. To resolve DeGracia’s grievance under
the arbitration process established by the CBA, SWA and SWAPA convened a System Board
of Adjustment (“SBOA”). Two members of the SBOA—Gerald Bradley (“Bradley”) and
Mark Clayton (“Clayton”)—were appointed by SWA. Two members were appointed by
SWAPA. The fifth member was a neutral arbitrator. DeGracia alleges that, during the
SBOA hearing on the grievance, Bradley repeatedly made negative comments based on
DeGracia’s race and national origin. At the conclusion of the hearing, the two SWAPA
members voted in favor of reinstating DeGracia, and Bradley, Clayton, and the neutral
arbitrator voted against reinstatement.
DeGracia sued SWA in Texas state court alleging claims under the TCHRA for race
and national origin discrimination. He asserts that, had SWA not discriminated against him,
at least one of the SWA-members (Bradley or Clayton) would have voted to reinstate him.
SWA removed the case to this court, contending that, because SWA is an employer subject
to the regulations of the RLA, 45 U.S.C. § 181, DeGracia’s discrimination claims are
governed by the CBA and are preempted by the RLA. DeGracia moves to remand and for
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an award of attorney’s fees, costs, and expenses under 28 U.S.C. § 1447(c).
II
As the removing party, SWA has the burden of overcoming an initial presumption
against jurisdiction and establishing that removal is proper. See, e.g., Howery v. Allstate Ins.
Co., 243 F.3d 912, 916 (5th Cir. 2001). The removal statute is to be strictly construed, Frank
v. Bear Stearns & Co., 128 F.3d 919, 922 (5th Cir. 1997), and “doubts regarding whether
removal jurisdiction is proper should be resolved against federal jurisdiction,” Acuna v.
Brown & Root Inc., 200 F.3d 335, 339 (5th Cir. 2000).
“Ordinarily, the well-pleaded complaint rule governs federal question jurisdiction.
Under the rule, [r]emoval is not possible unless the plaintiff’s ‘well pleaded complaint’ raises
issues of federal law sufficient to support federal question jurisdiction.” Ervin v. Stagecoach
Moving & Storage, Inc., 2004 WL 1253401, at *2 (N.D. Tex. June 8, 2004) (Fitzwater, J.)
(quoting Rodriquez v. Pacificare of Tex., Inc., 980 F.2d 1014, 1017 (5th Cir. 1993)) (internal
quotation marks omitted). Even if federal claims are available to the plaintiff, he may remain
in state court by relying exclusively on state law. Caterpillar, Inc. v. Williams, 482 U.S. 386,
392 (1987). A federal claim does not exist simply because facts are available in the
complaint to suggest such a claim. See Gemcraft Homes, Inc. v. Sumurdy, 688 F. Supp. 289,
292 (E.D. Tex. 1988). Complete preemption, however, is an exception to the well-pleaded
complaint rule and gives rise to removal jurisdiction. See Giles v. NYLCare Health Plans,
Inc., 172 F.3d 332, 336-37 (5th Cir. 1999).

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III
DeGracia’s motion to remand presents the question whether SWA has established that
DeGracia’s state-law claims are preempted by the RLA and FAA regulations. The court
considers first whether the claims are preempted by the RLA.
A
Congress enacted the RLA to provide a comprehensive and exclusive framework for
resolving labor disputes in the transportation industry. Hawaiian Airlines, Inc. v. Norris, 512
U.S. 246, 252 (1994). According to SWA, the RLA requires parties to a CBA to arbitrate all
disputes arising from the interpretation or application of the CBA. SWA posits that
DeGracia’s state-law discrimination claims are completely preempted by the RLA because
they cannot be adjudicated without interpreting the CBA. SWA maintains that DeGracia’s
claims are artfully pleaded to circumvent the procedures set forth in the RLA; the claims
arise solely from conduct that allegedly occurred during the SBOA process; the claims are
inextricably intertwined with consideration of the terms of the CBA and the SBOA process;
and the claims are nothing more than a collateral attack on the SBOA decision.
DeGracia moves to remand, arguing that the law is well settled that, where provisions
of the CBA are relevant to, but not dispositive of, the resolution of the plaintiff’s state-law
claims, the claims are not preempted by the RLA. DeGracia posits that his claims do not
require the court to interpret any provision of the CBA; instead, they present a factual
question based solely on SWA’s conduct and motives regarding his race and national origin
in determining whether to continue his training and employment.
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SWA responds that DeGracia’s claims arise out of the CBA grievance
procedures—not out of his employment with SWA—because he is complaining of conduct
that occurred during the SBOA hearing. It contends that a decision in DeGracia’s favor on
his discrimination claims would be contrary to the SBOA’s decision that just cause existed
for his termination. And SWA maintains that, to decide DeGracia’s state-law claims, the
court must interpret the CBA’s provisions regarding whether the SWA members of the
SBOA acted as agents of SWA or independently.
DeGracia replies that whether the SWA-appointed members of the SBOA acted as
agents of SWA is not relevant to his motion to remand, and that his employment rights
extended at least until the end of the SBOA hearing process.
B
The RLA requires that disputes “growing out of grievances or out of the interpretation
or application of agreements concerning rates of pay, rules, or working conditions” be
arbitrated. Hawaiian Airlines, 512 U.S. at 248 (quoting 45 U.S.C. § 153) (internal quotation
marks omitted). The RLA thus preempts federal- and state-law claims “involving the
interpretation or application of a CBA.” Hirras v. Amtrak, 44 F.3d 278, 281 (5th Cir. 1995)
(citing Hawaiian Airlines, 512 U.S. at 246). But “substantive protections provided by state
law, independent of whatever labor agreement might govern, are not preempted under the
RLA.” Hawaiian Airlines, 512 U.S. at 257.
To determine whether DeGracia’s state-law claims grow out of his grievance or out
of the interpretation or application of the CBA, the court first analyzes the elements of the
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claims. See, e.g., Richter v. Merch. Fast Motor Lines, Inc., 83 F.3d 96, 97 (5th Cir.1996)
(per curiam). Tex. Lab. Code Ann. § 21.051 provides that “[a]n employer commits an
unlawful employment practice if because of race, . . . [or] national origin, . . the employer:
(1) fails or refuses to hire an individual, discharges an individual, or discriminates in any
other manner against an individual in connection with compensation or the terms, conditions,
or privileges of employment[.]” DeGracia alleges that there is direct evidence that SWA
discriminated against him based on his race and/or national origin.

To establish

discrimination by direct evidence, DeGracia must prove that SWA made a direct and
unambiguous comment related both to the protected class of which he is a member and to his
termination, near in time to his termination, by an individual with authority over the decision
to terminate him. See Jackson v. Cal-Western Packaging Corp., 602 F.3d 374, 380 (5th Cir.
2010).1 If he makes this showing, the burden shifts to SWA to prove “it would have taken
the same action regardless of discriminatory animus.” Sandstad v. CB Richard Ellis, Inc.,
309 F.3d 893, 896 (5th Cir. 2002).
DeGracia’s TCHRA claims are independent of the CBA. He alleges that SWA
(through its agents who had authority to determine DeGracia’s employment status)2 made
comments regarding his national origin and race during the SBOA hearing. If DeGracia
1

Noting the parallels between the TCHRA and the federal antidiscrimination statutes,
the Supreme Court of Texas has consistently held that the analogous federal statutes and the
cases interpreting them aid in interpreting the TCHRA. See Reed v. Neopost USA, Inc. 701
F.3d 434, 439 (5th Cir. 2012).
2

According to DeGracia’s petition, Bradley (primarily) and Clayton (by means of
ratification).
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meets his initial burden, SWA must prove that it would not have reinstated DeGracia
regardless of SWA’s discriminatory animus. These issues do not turn on the interpretation
of any provision of the CBA; they turn on whether SWA failed to reinstate DeGracia because
of his race or national origin. See, e.g., Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S.
399, 407 (1998).3

Even if the court must refer to the CBA to decide DeGracia’s

discrimination claims, such references to the CBA do not alone establish that his claims are
preempted by the RLA. See, e.g., id. at 413 n.12 (explaining that a CBA may contain
information helpful to the determination of a state-law claim without preempting the statelaw claim). And even if SWA relies on the CBA to demonstrate that it had just cause to
terminate DeGracia, such reliance does not necessarily render his claims preempted. See
Anderson v. Am. Airlines, Inc., 2 F.3d 590, 596 (5th Cir. 1993) (holding that plaintiff’s statelaw workers compensation retaliation claim was not preempted by RLA even though
defendant would rely on CBA to establish just cause for its actions).
The distinction between consideration of or reference to a CBA, as opposed to
interpretation of the CBA, is illustrated and explained in Carmona v. Southwest Airlines Co.,
536 F.3d 344 (5th Cir. 2008). In Carmona a flight attendant alleged claims for sex
discrimination, disability discrimination, and failure to accommodate related to his

3

To the extent that SWA argues that DeGracia can only assert his discrimination
claims by seeking review of the SBOA decision according to the procedures set forth in the
CBA, the court rejects this argument. SWA has pointed to no provision in the CBA that
requires members to bring state-law discrimination claims through the process outlined in
the CBA. See, e.g., Ibarra v. United Parcel Serv., 695 F.3d 354, 356 (5th Cir. 2012).
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termination by SWA. Id. at 345. SWA argued that the district court lacked subject matter
jurisdiction because the plaintiff’s claims were preempted by the RLA. Id. at 346-47. The
Fifth Circuit held that the plaintiff flight attendant’s allegations of discrimination “d[id] not
bring the meaning of any CBA provisions into dispute”; therefore, “consideration of the CBA
as applied to Title VII and the [Americans with Disabilities Act]—not interpretation of the
CBA itself—is what is required to resolve [his] claims.” Id. at 349-50 (emphasis in original).
The panel noted that “Southwest’s contention that [the plaintiff’s] claims necessitate CBA
interpretation fails to recognize the distinction between reference to the CBA and reliance
on it.” Id. at 349. As the panel explained:
[a]s provisions of the CBA are relevant to, but not dispositive of,
the resolution of Carmona’s claims, his claims do not constitute
a minor dispute under the RLA. Even though a court would
have to refer to the CBA to consider fully each of the alleged
acts of disparate treatment, there is no disagreement about how
to interpret these provisions of the CBA that detail Southwest’s
procedures for assessing attendance, leave, discipline, and
termination. Carmona’s factual allegations that unexcused
absences by female flight attendants went unpunished, that
remarks of his supervisors regarding male employees were
discriminatory, and that his chronic illnesses were the real
reason he was fired, do not bring the meaning of any CBA
provisions into dispute. He alleges that CBA procedures were
applied in a discriminatory manner, not that CBA procedures
were fundamentally discriminatory. Thus, consideration of the
CBA as applied to Title VII and the ADA—not interpretation of
the CBA itself—is what is required to resolve Carmona’s
claims.
Id. at 349-50 (emphasis in original).
SWA argues that the adjudication of DeGracia’s state-law claims requires resolution

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of whether Bradley and Clayton acted as agents of SWA during the SBOA hearing, which
requires consultation of the CBA. The court disagrees. Resolution of this issue would not
involve interpretation of the CBA because it would not bring “any CBA provisions into
dispute[.]” Id. at 349. As in Carmona, neither party contends that the relevant provision of
the CBA is ambiguous or is otherwise in dispute. See id. The court would therefore accept
the terms of the CBA and apply principles of agency law to determine the scope of Bradley
and Clayton’s relationship with SWA. This court’s mere reference to the undisputed terms
of the CBA to resolve an issue incidental to DeGracia’s claims would not render them
preempted. See, e.g., Hawaiian Airlines, 512 U.S. at 261 n.8 (explaining that consultation
of the CBA during the course of state-law litigation does not render the claim preempted).
SWA also maintains that DeGracia’s claims are an impermissible collateral attack on
the SBOA decision. The court disagrees. On the face of DeGracia’s state-court petition, he
complains that SWA’s decision not to vote to reinstate him resulted from its discriminatory
animus toward him. He does not argue that SWA lacked just cause to terminate him, or that
the procedures of the CBA were not followed. Instead, he asserts that SWA violated his
employment rights, protected by the TCHRA, because it was motivated by his race and/or
national origin when he failed to reinstate him.4

4

SWA maintains that DeGracia’s employment rights ended when he was terminated
in 2014, and that he had no employment rights during the SBOA proceeding in 2015.
DeGracia alleges in his state-law petition, however, that his employment rights continued
until at least the conclusion of the SBOA hearing.
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IV
The court turns next to SWA’s contention that DeGracia’s state-law claims are
preempted by various aviation safety laws and regulations, i.e., 49 U.S.C. §§ 44701, et seq.,
and 14 C.F.R. 121.1, et seq. According to SWA, the FAA regulates commercial airlines’
training programs and preempts the field of airline safety.
DeGracia argues that neither SWA nor he has identified any FAA requirement that
is in conflict with his discrimination claims, and that were he reinstated (i.e., but for SWA’s
discrimination), he would have completed more—not less—training, which accords with the
purposes of the FAA.
SWA does not identify any provision of the FAA that preempts DeGracia’s state-law
discrimination claims. Instead, SWA simply states that the FAA preempts the field of airline
safety, and that the FAA warns against the dangers of employing pilots who have repeatedly
failed training. SWA has not demonstrated that DeGracia’s claims are preempted by federal
aviation regulations.
V
DeGracia requests an award of attorney’s fees under 28 U.S.C. § 1447(c).
“An order remanding the case may require payment of just costs and any actual
expenses, including attorney fees, incurred as a result of the removal.” 28 U.S.C. § 1447(c).
“Absent unusual circumstances, courts may award attorney’s fees under § 1447(c) only
where the removing party lacked an objectively reasonable basis for seeking removal.
Conversely, when an objectively reasonable basis exists, fees should be denied.” In re
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Enable Commerce, Inc., 256 F.R.D. 527, 533 n.14 (N.D. Tex. 2009) (Fitzwater, C.J.)
(quoting Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005)). “The decision to
award fees is a matter of discretion.” Fathergill v. Rouleau, 2003 WL 21467570, at *2 (N.D.
Tex. June 23, 2003) (Fitzwater, J.).
The court holds that DeGracia is entitled to recover his attorney’s fees, just costs, and
actual expenses because SWA lacked an objectively reasonable basis for seeking removal,
particularly in light of the Supreme Court’s opinion in Hawaiian Airlines and the Fifth
Circuit’s decision in Carmona.
A fee award is limited to the “fees and costs incurred in federal court that would not
have been incurred had the case remained in state court.” Avitts v. Amoco Prod. Co., 111
F.3d 30, 32 (5th Cir. 1997). If the parties cannot agree on the amount that DeGracia should
recover, and arrange for payment of that sum, DeGracia must file his fee application no later
than 28 days from the date this memorandum opinion and order is filed.
*

*

*

DeGracia’s motion to remand is granted. The courts holds that it lacks subject matter
jurisdiction and, pursuant to 28 U.S.C. § 1447(c), remands this case to the 101st Judicial
District Court of Dallas County, Texas. The clerk shall effect the remand according to the
usual procedure. SWA’s motion to consolidate this case with a lawsuit that DeGracia filed

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against SWA in this court is denied as moot.
SO ORDERED.
November 29, 2016.

_________________________________
SIDNEY A. FITZWATER
UNITED STATES DISTRICT JUDGE

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